Actions

S006

Negotiate

The activities associated with preparation, dialogue and reaching an agreement for the purpose of purchasing products or services. This includes understanding the product or service to purchase, knowing the seller, understanding bargaining positions of parties involved, fact finding meetings, internal reviews, bargaining meetings and debriefings.

General objectives of negotiation include:

  • Agree on specifications of product or service - what
  • Agree on a fair price for product or service - how much
  • Agree on delivery terms and conditions - when, where
  • Agree on delivery performance - quality, on-time performance

Additional objectives of negotiation may include agreement on information exchange, inspection processes, flexibility.

Notes

Negotiation is sometimes confused with haggling or price cutting (win-lose). Whereas some situations require such approaches, the Negotiate process is intended to cover negotiations from the widest possible interpretation -- including approaches such as win-win, collaborative and alliance related negotiations. Orders Damage Free Ratio Orders Defect Free Ratio Orders On-time Ratio Orders In-full Ratio Error-free Documentation Ratio Sourcing Cycle Time Cost of Goods Sold Distribution Costs Days of Inventory Days Payables Outstanding Intake Sustainability Ratio Balanced Scorecard t:Two-Stage Tendering

Hierarchy

IDNameLevelx
S0Strategic Sourcing2S0
S006Negotiate3S006

Metric(s)

IDNameLevelx
DP11Orders Damage Free Ratio2DP11
DP12Orders Defect Free Ratio2DP12
DP13Orders On-time Ratio2DP13
DP14Orders In-full Ratio2DP14
DP15Error-free Documentation Ratio2DP15
RS14Sourcing Cycle Time2RS14
CO11Cost of Goods Sold2CO11
CO12Distribution Costs2CO12
AE12Days of Inventory2AE12
AE13Days Payables Outstanding2AE13
SD11Intake Sustainability Ratio2SD11

Workflow

FromInput(s)
Process
Output(s)To
wf_processwf_arrow
C104Negotiations
S004Potential Supplier
S005Potential Supplier
G402Reporting Requirements
S006
wf_arrowwf_process
NegotiationsC104
Accepted OfferS007
Note: Common inputs and outputs are listed in alphabetical order. Other inputs and outputs may be required to support varying use cases.Negotiate Strategic Sourcing 5200600 3 {{{keywords}}} {{{description}}}